20181211-招商证券_香港_-百富环球-00327.HK-Positioned_to_regain_solid_growth_momentum__initiate_with_BUY_and_TP_of_HK_4.5_16页_1mb
报告摘要
Summary of PAX Global (327 HK) Company Report
Core Content
PAX Global is a leading supplier of e-payment terminal solutions with a global market share of 9% (ranked No.5 globally) and a diverse customer base across 100+ countries. The company is positioned to benefit from the rising adoption of e-payment, particularly in emerging markets, where it holds a strong market position. Despite facing challenges in the China market due to intense price competition and a shifting product mix, PAX's overseas operations have been a significant growth driver, contributing 85% of total revenue in 1H18.
Main Points
- Growth Potential: PAX is expected to achieve a 17% CAGR in revenue and 26% CAGR in net profit from 2017 to 2020E, driven by robust shipment growth and the low penetration of POS terminals in emerging markets.
- Market Share: PAX leads in Latin America with 28% market share (No.1) and holds 9% in Middle East & Africa (No.3).
- Valuation: PAX shares are currently trading at 5x 2019E P/E, significantly undervalued compared to its historical average of 8x and peer average of 15x.
- Investment Rating: The report initiates coverage with a BUY rating and sets a target price of HK$4.50, based on 7x 2019E EPS of HK$0.64.
- Financial Position: PAX maintains a healthy net cash position (>50% of market cap) and has low debt. It has outsourced manufacturing to reduce capital expenditures and focuses on R&D (7-10% of annual revenue) to maintain competitive edge.
- Product Portfolio: PAX offers a wide range of e-payment terminals, including Smart POS, E-Series, QR code series, Mobile series, and Countertop/Wireless series, each targeting different market segments.
Key Financial Metrics (HK$ mn)
| Metric | 2016 | 2017 | 2018E | 2019E | 2020E |
|---|---|---|---|---|---|
| Revenue | 2,915 | 3,591 | 4,351 | 4,990 | 5,686 |
| Net Profit | 601 | 408 | 612 | 706 | 807 |
| EPS (HK$) | 0.54 | 0.37 | 0.56 | 0.64 | 0.73 |
| P/E (x) | 9.6 | 9.5 | 6.0 | 5.2 | 4.5 |
| P/B (x) | 1.7 | 1.0 | 0.8 | 0.7 | 0.6 |
| ROE (%) | 18.4% | 11.0% | 14.5% | 14.7% | 14.8% |
Key Risks
- Stagnation in e-payment adoption: Growth is contingent on rising e-payment usage in emerging markets.
- Price competition and product mix shifts: Intense price competition in China and shifting product mix (e.g., QR code scanners) could impact profitability.
- Threats from new entrants: Lower-cost competitors may erode PAX's market share.
- Product concentration risk: Over 98% of revenue comes from hardware, making it vulnerable to product failures or security issues.
- Overseas expansion risks: Intense competition and pricing pressures in emerging and developed markets.
- Trade war exposure: PAX was previously on the first list of goods hit with tariffs, though it was removed from subsequent lists.
- Complexity of business transition and M&A execution: Risks associated with integrating M&A targets and transitioning to recurring services.
Investment Thesis
- PAX is well-positioned for growth due to its strong international presence and rising e-payment adoption in emerging markets.
- The company's overseas revenue grew over 6x from 2013 to 2017, and it is expected to continue this growth trajectory.
- PAX's strong R&D focus (7-10% of revenue) and asset-light business model support its competitive edge.
- Despite a recent earnings decline, PAX's 2018E net profit is forecasted to grow >50%, signaling a recovery.
- The company's current valuation is considered undemanding, with a significant upside potential based on its expected earnings growth.
Regional Breakdown
| Region | Revenue Contribution (1H18) | YoY Growth | Notes |
|---|---|---|---|
| LACIS | 47.7% | 57.0% | Strong growth in Latin America and Russia |
| EMEA | 20.9% | 49.1% | Expansion in Europe and Middle East |
| APAC (excluding China) | 8.1% | 45.0% | New subsidiaries in Japan and India |
| USCA | 8.1% | 2.3% | Gained orders from Disneyland |
| China | 15.2% | -45.2% | Challenging market with declining revenue |
Valuation and Peer Comparison
| Company Name | Ticker | CMS Rating | Mkt Cap (USD bn) | Current Price | Target Price | Upside (%) | 2018E P/E | 2019E P/E | 2018E P/B | 2019E P/B | 2018E EV/EBITDA | 2019E EV/EBITDA | 2018E ROE | 2019E ROE | 2018E Dividend Yield | 2019E Dividend Yield | Net D/E 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| PAX Global | 327 HK | BUY | 0.5 | 3.31 | 4.50 | 36% | 6.0 | 5.2 | 0.8 | 0.7 | 2.0 | 1.3 | 15% | 15% | 2.4% | 3.0% | -47% |
| Ingenico | ING FP | N/R | 4.1 | 57.20 | - | - | 12.4 | 11.0 | 1.8 | 1.7 | 10.5 | 9.4 | 15% | 16% | 2.6% | 2.9% | 81% |
| Newland | 000997 CH | N/R | 2.2 | 15.21 | - | - | 22.7 | 17.7 | 2.9 | 2.5 | 18.6 | 14.0 | 12% | 14% | 0.8% | 0.5% | -42% |
| Nexgo | 300130 CH | N/R | 0.9 | 12.74 | - | - | 23.4 | 15.8 | 2.5 | 2.2 | n.a. | n.a. | 10% | 13% | n.a. | n.a. | 19% |
Conclusion
PAX Global is viewed as a solid growth opportunity due to its strong international presence, robust shipment growth, and strategic focus on R&D and overseas expansion. Despite current valuation concerns, the company is expected to recover and outperform the market, supported by its diversified product portfolio and asset-light business model. The report recommends a BUY rating with a target price of HK$4.50. However, risks such as e-payment adoption stagnation, price competition, and trade war exposure remain potential threats to its growth trajectory.
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